Activist investment firm and the largest minority shareholder in Toyota Industries Corporation (TIC), Elliott Investment Management L.P. and Elliott Advisors (UK) Limited, have published an open letter to investors outlining its opposition to a revised offer for shares it says is 40% below value.

Toyota Fudosan has now offered JPY18,800 (USD119) per share. The initial tender offer from Toyota Fudosan was JPY16,300 (USD103.25).

Toyota is pushing the deal as it works to untangle a complex web of cross-shareholdings. 

Elliott, which increased its stake in Toyota in November, says the company’s intrinsic net asset value is more than JPY26,000 (USD164.72) - per share - and “that the Standalone Plan for Toyota Industries offers a clear path to a valuation of more than JPY40,000 (USD253.42) per share by 2028”.

“Our investment reflects our strong conviction in the company, its value and its immense potential as a standalone business,” Elliott’s letter to shareholders states of its stake in TIC.

“Based on our conversations with many of you, we know that you share our concerns regarding the attempt by Toyota Fudosan Co., Ltd ("Toyota Fudosan") to squeeze out minority shareholders of Toyota Industries at a deeply discounted and unfair valuation in a coercive transaction. 

“Although Toyota Fudosan's revised tender offer bid at JPY18,800 per share (the "Revised TOB") acknowledges the inadequacy of the original transaction terms, the new price continues to very substantially undervalue Toyota Industries, whose intrinsic net asset value is JPY26,134 per share or almost 40% above the Revised TOB price. 

“If successful, the Revised TOB would represent a major setback for corporate governance, minority shareholder rights and fair M&A in Japan.

“Elliott does not intend to tender its shares into the Revised TOB and we strongly encourage other shareholders not to tender.”